Abstract:
This study is conducted to analyze the dominant factors of product differentiation strategy that increase export potential. The object of the research is local sandal producers in Bali. By understanding the dominant factors of the local products, the researcher expects the research can help local producers to enhance and optimizing the superior characteristics of local sandals.
Balinese sandals have become one of the most attractions of souvenirs from Bali Island. It is known that the export of local sandals shows quite a significant increase that it reaches US$ 3.8 million during period January to October 2011. It explains that local sandals have a very good potential to be developed more and more. Preliminary in-person interview toward three local producers is done and results that there are three major characteristics which are design, style, and reparability. Moreover, according to secondary data found, durability also becomes one of the most dominant characteristics of local products. However, due to the globalization, competitors are coming from all around the world that creates tight competition. Based on the background of study and problem found, the researcher decides to implement product differentiation strategy developed by Phillip Kotler (2003).
Due to limitation of time and other limitations in gathering the data, the researcher focuses on product differentiation instead of analyzing other differentiation strategy. The researcher focuses on 50 local producers spread around Bali, and samples are gathered by using snowball sampling technique. The researcher uses both qualitative and quantitative method to process the data. As for analyzing the data, the researcher implements Exploratory Factor Analysis (EFA) that he expects the dominant factor of local products will come out.
KMO and Bartlett’s test shows a value of 0.647 and indicates that the research value is mediocre for an appropriate statistical treatment. Cumulative percentage total variance explained is 70.871% which means there are 29.129% of variable variance that cannot be illustrated or explained in this study. Only five components are formed and that indicates there are only five factors that possess Eigenvalue more than 1. Finally, period of usage, after-sale service, product lifetime, easiness to clean, difficulty to imitate, and lastly product image turn out to be the most dominant factors in this research.
